EX-99.1 2 thirdquarter07pressrelease.htm PRESS RELEASE THIRD QUARTER 2007 thirdquarter07pressrelease.htm
Exhibit 99.1

Contact:  Kathleen Campbell, Marketing Director                                                                 First Citizens National Bank
                 570-662-0422                                                                                                               15 S. Main Street
                 570-662-8512 (fax)                                                                                                     Mansfield, PA 16933
 
 
Citizens Financial Services, Inc. Reports Third Quarter 2007 Earnings

MANSFIELD, PENNSYLVANIA— October 18, 2007 – Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the third quarter of 2007.

Net income for the three months ended September 30, 2007 was $1,754,000 which compares to $1,548,000 for the third quarter last year.  This is an increase of $206,000, or 13.3%.  On a year to date basis net income through September 30 was $4,894,000 compared with $4,310,000 last year, representing an increase of $584,000, or 13.5%.  Earnings per share for the nine months ended September 30, 2007 and 2006 were $1.72 and $1.50 per share, respectively, representing a 14.7% increase.  Return on equity for the comparable periods were 14.08% and 13.18%, respectively.

CEO and President Randall E. Black stated, “During the third quarter, we have begun to see some slight improvement in our net interest margin.  The Federal Reserve’s decision at its September meeting to cut the federal funds rate 50 basis points has resulted in a slight positive impact on the short-term end of the yield curve.  This 50 basis point reduction, as expected, has had a greater impact on improving our margin by reducing the cost of our short term borrowing and deposit costs, compared to the reduction in interest rates on our prime based loan portfolio.”

Net interest income before the provision for loan losses totaled $13,998,000, an increase of $686,000 compared to the first nine months a year ago, while non-interest expenses have increased only $195,000 for the same period.  “We continue to examine ways to become a more efficient organization without sacrificing what we do best, serving the customer,” stated Mr. Black.

Since September of last year, total assets have increased $23.5 million, or 4.2%.  At the end of September total assets were $584.1 million, which compares to $560.7 million as of last September and $572.2 million as of December 31, 2006.  Since last September, net loans have increased $7.6 million, an increase of 1.9%.  Total deposits have increased $16.6 million while borrowed funds have increased $2.3 million.

Stockholders’ equity, excluding accumulated other comprehensive income, has increased $3.3 million, or 7.4% since last September.  Book value per share at September 30, 2007 was $16.89 compared with $15.76 last year, an increase of 7.2%.  In October, a cash dividend of $.23 per share was declared and will be paid to shareholders on October 26, 2007 to record holders as of October 12, 2007, which represents an increase of 4.5% over the October 2006 dividend.

Citizens Financial Services, Inc., has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties, Pennsylvania and Allegany County, New York, where their 16 offices are located.

Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include operating, legal and regulatory risks; changing economic and competitive conditions and other risks and uncertainties.



CITIZENS FINANCIAL SERVICES, INC.
      
CONSOLIDATED BALANCE SHEET
      
(UNAUDITED)
      
       
 
September 30
December 31
September 30
(in thousands except share data)
2007
2006
2006
ASSETS:
      
Cash and due from banks:
      
  Noninterest-bearing
 $           10,468
 $         10,007
 $               9,616
  Interest-bearing
                       13
                      8
                       26
Total cash and cash equivalents
               10,481
            10,015
                  9,642
Available-for-sale securities
            117,787
          109,743
              103,301
Loans (net of allowance for loan losses:
      
  2007, $4,112; December 31, 2006, $3,876; and September 30, 2006, $3,841)
            415,328
          410,897
              407,769
Premises and equipment
               12,627
            12,892
                12,574
Accrued interest receivable
                 2,784
              2,458
                  2,407
Goodwill
                 8,605
              8,605
                  8,605
Bank owned life insurance
                 8,293
              8,047
                  7,967
Other assets
                 8,217
              9,511
                  8,389
       
TOTAL ASSETS
 $         584,122
 $       572,168
 $           560,654
       
LIABILITIES:
      
Deposits:
      
  Noninterest-bearing
 $           53,867
 $         48,509
 $             49,741
  Interest-bearing
            410,869
          398,006
              398,418
Total deposits
            464,736
          446,515
              448,159
Borrowed funds
               66,593
            75,775
                64,295
Accrued interest payable
                 2,029
              2,287
                  1,994
Other liabilities
                 4,296
              4,091
                  2,628
TOTAL LIABILITIES
            537,654
          528,668
              517,076
STOCKHOLDERS' EQUITY:
      
Common Stock $1.00 par value; authorized, 10,000,000 shares; issued
      
  3,020,537 shares in 2007 and 2,992,896 at December 31, 2006
      
  and September 30, 2006
                 3,021
              2,993
                  2,993
Additional paid-in capital
               12,511
            11,933
                11,933
Retained earnings
               36,399
            34,007
                33,140
Accumulated other comprehensive loss
               (1,426)
             (1,737)
                (1,018)
Unearned restricted stock:  2,785 shares for 2007 and 0 shares for 2006
                    (65)
                      -
                          -
Treasury Stock, at cost, 185,433 shares for 2007, 172,954 shares at December 31, 2006
      
  and 162,674 shares at September 30, 2006
               (3,972)
             (3,696)
                (3,470)
TOTAL STOCKHOLDERS' EQUITY
               46,468
            43,500
                43,578
TOTAL LIABILITIES AND
      
   STOCKHOLDERS' EQUITY
 $         584,122
 $       572,168
 $           560,654



CITIZENS FINANCIAL SERVICES, INC.
        
CONSOLIDATED STATEMENT OF INCOME
        
(UNAUDITED)
        
 
Three Months Ended 
Nine Months Ended 
 
September 30, 
September 30, 
(in thousands, except per share data)
2007
2006
2007
2006
INTEREST INCOME:
        
Interest and fees on loans
 $                7,715
 $                 7,226
 $               22,611
 $               20,639
Interest-bearing deposits with banks
                            4
                            -
                            4
                            -
Investment securities:
        
    Taxable
                    1,130
                       851
                    3,201
                    2,549
    Nontaxable
                       242
                       232
                        691
                        679
    Dividends
                         88
                         74
                        257
                        223
TOTAL INTEREST INCOME
                    9,179
                    8,383
                  26,764
                  24,090
INTEREST EXPENSE:
        
Deposits
                    3,366
                    3,067
                  10,106
                    8,390
Borrowed funds
                       928
                       849
                    2,660
                    2,388
TOTAL INTEREST EXPENSE
                    4,294
                    3,916
                  12,766
                  10,778
NET INTEREST INCOME
                    4,885
                    4,467
                  13,998
                  13,312
Provision for loan losses
                         60
                       105
                        225
                        225
NET INTEREST INCOME AFTER
        
    PROVISION FOR LOAN LOSSES
                    4,825
                    4,362
                  13,773
                  13,087
NON-INTEREST INCOME:
        
Service charges
                       809
                       827
                    2,369
                    2,342
Trust
                       123
                       135
                        387
                        372
Brokerage and insurance
                         37
                         77
                          86
                        230
Investment securities gains, net
                         24
                           5
                          24
                            4
Gains on loans sold
                         18
                         11
                          82
                          24
Gains on sales of foreclosed properties
                            -
                            -
                        396
                          47
Earnings on bank owned life insurance
                         84
                         78
                        246
                        224
Other
                         83
                         80
                        306
                        293
TOTAL NON-INTEREST INCOME
                    1,178
                    1,213
                    3,896
                    3,536
NON-INTEREST EXPENSES:
        
Salaries and employee benefits
                    2,130
                    2,055
                    6,256
                    6,078
Occupancy
                       268
                       261
                        877
                        845
Furniture and equipment
                       137
                       146
                        405
                        442
Professional fees
                       149
                       125
                        469
                        371
Amortization
                         36
                         36
                        108
                        216
Other
                    1,068
                    1,075
                    3,406
                    3,374
TOTAL NON-INTEREST EXPENSES
                    3,788
                    3,698
                  11,521
                  11,326
Income before provision for income taxes
                    2,215
                    1,877
                    6,148
                    5,297
Provision for income taxes
                       461
                       329
                    1,254
                        987
NET INCOME
 $                1,754
 $                 1,548
 $                 4,894
 $                 4,310
         
Earnings Per Share
 $                   0.62
 $                   0.54
 $                   1.72
 $                   1.50
Cash Dividends Paid Per Share
 $                0.225
 $                 0.215
 $                 0.670
 $                 0.640
         
Weighted average number of shares outstanding
            2,835,546
             2,863,404
            2,842,115
             2,877,852

 

 
Financial Highlights
(Unaudited - In Thousands, Except Per Share and Ratio Data)
  
2007
  
2006
 
 
Nine Months Ended September 30
    
Net Income
 $                  4,894
 $                 4,310
Comprehensive Income
5,205
4,833
Per common share data:
    
    Earnings per share
 $                    1.72
 $                   1.50
    Cash dividends paid per share
 $                  0.670
 $                 0.640
Performance Ratios:
    
    Return on average assets (annualized)
1.13%
1.06%
    Return on average equity (annualized)
14.08%
13.18%
     
     
Three Months Ended September 30
    
Net Income
 $                  1,754
 $                 1,548
Per common share data:
    
    Earnings per share
 $                    0.62
 $                   0.54
    Cash dividends paid per share
 $                  0.225
 $                 0.215
Performance Ratios:
    
    Return on average assets (annualized)
1.20%
1.12%
    Return on average equity (annualized)
14.85%
14.03%
     
     
At September 30
    
Assets
 $              584,122
 $             560,654
Investment securities:
    
    Available for sale
117,787
                103,301
Loans (net of unearned income)
419,440
                411,610
Allowance for loan losses
4,112
                    3,841
Deposits
464,736
                448,159
Stockholders' Equity
46,468
                  43,578
Non-performing assets
2,527
                    3,141
Average Leverage Ratio
8.10%
7.91%
Per common share data:
    
    Book value
 $                  16.89
 $                 15.76
    Market value (average of bid/ask price)
                     21.75
$22.50
    Market price to book value ratio
128.75%
142.79%



       
     
Cash Dividends
Common Stock Information:
Bid
Ask
Paid
       
Quarter Ended:
      
       
September 30, 2007
$21.50
$22.00
$0.225
June 30, 2007
$21.20
$22.50
$0.225
March 31, 2007
$22.55
$23.00
$0.220
December 31, 2006
$22.00
$23.50
$0.220
       
September 30, 2006
$22.00
$23.00
$0.215
June 30, 2006
$21.60
$23.00
$0.215
March 31, 2006
$21.35
$23.25
$0.210
December 31, 2005
$20.80
$21.00
$0.210